Buying your first home at an auction can be both exciting and daunting. Getting prepared early and understanding what needs to be done will give you more confidence in placing a bid on the day. See our tips below to get prepared and maximize your chances of securing your property at the right price.
Get a fully assessed pre-approval…EARLY!
Securing a fully assessed pre-approval early is the most important step if you are looking to bid at an auction as this will guide you in knowing how much you can afford to bid. Making a bid at auction without the certainty of loan finance is a very high-risk strategy. However, not all pre-approvals are the same, so ensure you speak with your broker or bank to have confidence that your pre-approval will hold up once your offer is accepted.
Get your solicitor/conveyancer to check the contract
Do not bid on a property until your solicitor has given you the green light. Contracts for sale by auction are complex and without the benefit of a cooling-off period, you’ll have to live with any nasty surprises about the property if you're the highest bidder.
Get your pre-inspections done before auction
Get a pest and building inspection completed well before the auction date. If anything adverse comes up on the report, you have the time to get an idea of the costs of repairs to ensure you bid effectively.
Get your deposit ready
If you are the lucky winner of the auction you will be required to pay a deposit on the spot, generally 10% of the purchase price. Ask the agent which is the preferred method of payment. Knowing how this needs to be paid beforehand will save a lot of hassle on the day. This could include getting a personal or bank cheque ready, purchasing a deposit bond or alternatively ensuring your bank transfer limits are increased.
Set your limit
Before going into an auction, limit the maximum amount you are willing to bid. This is based on how much your loan pre-approval is approved for, what you believe you can comfortably afford and ultimately what you think the property is worth. By having this figure clear before you bid, reduces the risk of overpaying for the property in the heat of the auction.
Speak with your local mortgage broker so you can be updated and informed. Sparks Finance is willing to help you understand the sometimes-daunting property buying and finance process in Bathurst. Don’t hesitate to contact us.
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